Coinbase Announces Zero-Fee USDT to USDC Stablecoin Conversion

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In what may perhaps sign the beginning of a new stage in the battle for stablecoin dominance, Coinbase, the world’s 2nd-greatest crypto exchange by investing quantity, is now encouraging its customers to swap from Tether’s USDT to  Circle’s USDC with zero-price trades.

“The functions of the past couple of weeks have set some stablecoins to the exam, and we’ve noticed a flight to security,” the exchange stated in a blog site submit. “We believe that USD Coin (USDC) is a trustworthy and respected stablecoin.”

Launched in 2018, USDC is managed by Centre, a consortium fashioned to enhance the mainstream adoption of stablecoins. Coinbase, alongside with the Boston-based mostly economic companies company Circle, is the founding member of the consortium.

With a market capitalization of $42.8 billion, USDC is the industry’s 2nd major stablecoin powering USDT, which is valued at $65.7 billion, facts from Coingecko exhibits.

In accordance to Coinbase, USDC is “unique” as it is 100% backed by cash and limited-dated U.S. treasuries held in U.S. controlled financial institutions, that means the stablecoin can generally be redeemed 1:1 for U.S. dollars.

“Customers are contacting for transparency, and USDC provides via monthly attestations by Grant Thornton LLP, a single of America’s largest audit, tax, and advisory corporations,” stated Coinbase, introducing that its qualified prospects earn up to 1.5% APY on their USDC holdings with Coinbase.

Stablecoin struggle rages on

Issued by Tether, USDT briefly dropped its claimed parity to the dollar quickly following the collapse of FTX final month, investing arms at practically 97 cents on November 9.

Commenting on the depegging, Tether claimed that “throughout durations of current market volatility, the investing selling price for USDT that is quoted on exchanges may well fluctuate. This occurs due to the fact there is additional demand from customers for liquidity than exists on that exchange’s buy books and has absolutely nothing to do with Tether’s capability to maintain its peg nor the price or makeup of its reserves.”

In Oct, Tether announced the agency wholly eradicated professional paper from its reserves, changing those people investments with U.S. Treasury Expenses.

USDC, in switch, had problems on its own in latest weeks as the world’s greatest crypto trade Binance, which runs a competing stablecoin called BUSD, moved to discontinue assistance for USDC, Paxos’s Pax Dollar, and TrueUSD.

Starting from September 29, the trade immediately converts any remaining USDC, USDP, and TUSD balances to BUSD, the third-largest stablecoin with a industry cap of $22 billion.

In an SEC filing final month, Circle admitted that the collapse of FTX and computerized conversions of USDC on Binance will bring about the firm’s general performance to be “materially lower” than the projections it created in February.

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